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Direct marketing – Getting the edge on response

February 22, 2013

To steer Asendia’s success, it is in our interest to fully understand global DM efforts. To that end, our management turned to the Direct Marketing Association (DMA) (, the world’s largest global trade association of businesses and NPOs using and supporting multichannel direct marketing tools and techniques.

There may be as many as 10 million direct marketing users in the US today: from a local contractor sending letters to his neighbors to the largest Fortune 500 companies. American marketers – commercial and non-profit – spent almost USD 170 billion on DM efforts in 2012, more than half of all US ad expenditures. In turn, those costs generated some $2.05 trillion in incremental sales, accounted for 8.7% of total US gross domestic product and made an estimated 9.2 million jobs.

The Response Rate Report

The completed surveys were collated with an eye to a detailed follow-up report. Completed, it covers five formats of direct mail (letter-sized envelopes, postcards, oversized envelopes, dimensional mail, and catalogs), email, paid search, Internet display ads and telephone marketing —while also offering data on DRTV[1], mobile marketing, Direct Response magazine, Direct Response newspaper, inserts, Direct Response radio, and digital out-of-home—with performance metrics for each medium.

The report has two primary objectives—to provide benchmarks for media performance for the Direct Marketing community and to group findings into several segments for marketers to see how organizations like their own are performing in their campaigns. In summary: 

  • Nearly two-thirds (66%) of respondents indicated that their representative campaign was B2C. B2C mailings across the board had lower costs per thousand than their B2B counterparts. For example, the cost per thousand (CPT) of a B2C letter-sized envelope mailing was 556 dollars, while a B2B mailing had a CPM of 919 dollars. The relationship between response rates differed from format to format. For letter-sized mailings, B2C outperformed B2B 4.01% to 3.12%. In all other formats, B2B had higher response.
  • Letter-sized direct mail had a response rate of 3.40% to a house list[2] and 1.28% to a prospect list. Catalogs had a higher response for current or former customers (4.26%), a lower one for prospects (0.94%).

Traditional Channels Remain Important

In the nine years since DMA first published the Response Rate Report, Direct Marketing response rates have fallen from 4.37% to 3.40% for letter-sized mail to house files, and from 2.14% to 1.28% to prospect files. Yet the response rate remains almost unchanged from 2010, when respondents reported a 3.42% response to the house list versus 1.38% to a prospect list.

Although direct mail response rates have dipped, they remain well above those for digital channels – and remain competitive with digital channels in their cost per order or lead. Direct Marketing by its nature targets a response, and statistics show that for every 1,000 existing customers receiving a Direct Marketing piece, an average 34 will respond. By contrast, the response to email campaigns that target new sales averages 0.12%[3], meaning only one customer in a thousand will actually purchase the product offered. Other digital channels also have low rates. Cost structures vary tremendously, so ROI is actually better for emails, paid search campaigns and Internet display ads. But in terms of driving response, direct mail still wins.

In actual fact, in conjunction with other media, a physical mailing is a key form of marketing that offers both a tangible and a highly trustworthy information platform. The letter has been a symbol of dialogue between people for centuries, regardless of whether they lived in different regions, countries, or even on different continents. And today, the letter continues as an acknowledged and trust-inspiring international mail option. It builds bridges as it disseminates information. So while the trend toward the digital channels is clear, the role of the physical mailing cannot be underestimated.

[1] DRTV, short for Direct Response Television; includes any TV advertising that asks consumers to respond directly to the company, usually either by calling an 800 number or by visiting a web site.

[2] House list: List of current and former customers that comes from an organization’s own database

[3] measured by taking the click-through rate and multiplying the median conversion per click

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